Escheatment - Definition, process, and state by state timelines. DRS owners need to be aware of these policies.

[tehchives]

Computershare 2018 report on Escheatment - https://content-assets.computershare.com/eh96rkuu9740/df5beb3a68bb4705b42ea612d31ca982/358538b031f683476ca1d4705bd0f8df/Escheatment_White_Paper.pdf

In the United States, generally, if an asset's owner is not able to be contacted and there knowledge of where they are, eventually assets will be turned over to the state after a due diligence period. Exact details vary by the state. Once at the state they can be claimed for a time by the individual or, in some cases, direct family.

In the case of stock, "Issuers and their transfer agents must conduct various due diligence mailings and database searches prior to the property being escheated, as required by the states or the Securities Exchange Commission (SEC)." See: https://www.law.cornell.edu/cfr/text/17/240.17Ad-17

WhyDRS should organize the escheatment protocols for each state and territory and provide this information to investors so that they are aware of what their home state rules are and how to avoid unintentional triggering of these policies.

[JFWooten4]

Chiefly, love the ideas flowing our and becoming part of the new public documentation, Chives. 👏

I am thinking we could integrate this into TAR, perhaps move to a formal Discussion? 🫱🏼‍🫲🏽

Not to rain on the chat here, but I just think it's a much larger policy issue that should truly get addressed by the regulators, as more and more investors chose to hold assets this way, using platforms which might not have technical capabilities promoting ongoing investor actions like transacting.¹

Footnotes

1. I mean, seriously, I DRS from broker and then TA sends me literally a one-page letter which "represents my account." 🤣 ↩

[tehchives]

It could be moved, but I think having a spotlight page defining how this process works and how that process can vary depending on local law and jurisdiction is important. If there were regulatory updates which streamlined this process in the future, or made disclosure expectations more clear, that would be great! At the moment I think most people meet activity standards and provide enough PII to ensure that their assets never fall into this trap, but it's not done consciously and results in a lot of confusion if state forfieture does happen, or undue alarm if just hearing about the process for the first time.